S&P 500 drops to third straight loss after tech rally fades

NEW YORK (AP) — Another afternoon fizzle for stocks left the Standard & Poor’s 500 index with its third straight loss on Tuesday.

The market seemed like it was headed for a gain in the morning, after technology stocks recovered from one of their few stumbles this year. But the tech rally lost momentum as the afternoon went on, and losses for telecom stocks and utilities helped cement the S&P 500’s longest losing streak in nearly four months.

The S&P 500 fell 9.87 points, or 0.4 percent, to 2,629.57. It had been up 0.3 percent in the morning, and it marked the second straight day where an early rally ended up petering out.

The Dow Jones industrial average lost 109.41, or 0.5 percent, to 24,180.64, and the Nasdaq composite fell 13.15, or 0.2 percent, to 6,762.21. Losers outnumbered winners on the New York Stock Exchange by nearly two to one.

The market’s ups and downs have come as investors sift through Congress’ twin proposals to revamp the tax system. The Senate and House of Representatives are trying to reconcile their respective versions before sending it to President Donald Trump for his approval, and investors are trying to figure out which industries and companies will come out as winners and losers from it.

After leading the market for most of this year, technology stocks moved into the losers’ column recently. Technology companies already pay some of the lowest effective tax rates of companies in the S&P 500, so they have less to gain from the proposal.

Tech stocks in the S&P 500 began to stumble last week as expectations ramped up for the tax overhaul and as investors shifted into companies that stand to benefit most from lower rates, such as financial companies. It culminated in a loss of 1.9 percent for S&P 500 tech stocks on Monday, the first trading day after the Senate passed its version of the tax overhaul. The Senate’s proposal to keep the alternative minimum tax for all companies also hurt tech stocks.

It’s a rare stumble for the tech industry, which had climbed twice as much as the S&P 500 in the first 11 months of the year. And that attracted buyers.

Chip makers and internet companies led the market on Tuesday, and technology stocks in the S&P 500 rose 0.2 percent. It was the only sector of the 11 that make up the index to rise, though it had been up as much as 1.4 percent earlier in the day.

Micron Technology rose $1.31, or 3.3 percent, to $41.21 for the largest gains in the S&P 500.

“I don’t think this is the beginning of the end for tech,” said Brian Nick, chief investment strategist at Nuveen. “Tech is going to be supported by very strong earnings, which is ultimately what’s going to drive the market next year.”

The rest of the market, though, was down on Tuesday. Telecom stocks fell 1.8 percent for the sharpest loss among the index’s sectors. A day earlier, it had the market’s strongest gains. Utilities, industrial companies and retailers were also weak.

Edison International slumped $10.26, or 12.8 percent, to $70 for the biggest loss in the S&P 500. Wildfires are raging outside Los Angeles, and investors are guessing the damage could result in losses for the company’s Southern California Edison electric utility subsidiary.

In Europe, markets were down modestly as negotiations continued for the United Kingdom’s pending departure from the European Union.

France’s CAC 40 dipped 0.3 percent, and Germany’s DAX fell 0.1 percent. The FTSE 100 in London lost 0.2 percent.

In Asia, Tokyo’s Nikkei 225 index slipped 0.4 percent, Hong Kong’s Hang Seng index dropped 1 percent and the Kospi in South Korea gained 0.3 percent.

In the bond market, Treasury yields fell as bond prices rose. The yield on the 10-year Treasury note dropped to 2.35 percent from 2.37 percent late Monday.

The dollar ticked up to 112.62 Japanese yen from 112.60 yen late Monday. The euro dipped to $1.1816 from $1.1855, and the British pound fell to $1.3442 from $1.3471.

Benchmark U.S. crude rose 15 cents to settle at $57.62 per barrel. Brent crude, the international standard, gained 41 cents to $62.86 a barrel in London.

Natural gas fell 7 cents to $2.91 per 1,000 cubic feet, heating oil rose 2 cents to $1.91 per gallon and wholesale gasoline gained 3 cents to $1.72 per gallon.

Gold slipped $12.80 to settle at $1,264.90 per ounce, silver lost 31 cents to $16.07 per ounce and copper dropped 14 cents to $2.95 per pound.